Jordan is Sliding Toward Insolvency -Carnegie Endowment for Peace

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This article provides an interesting overview of Jordan’s worsening economic situation. About 79% of the budget is covered by revenue. The remaining 20%+ is covered by a combination of debt and foreign aid. Not surprisingly, Jordan’s absolute debt has more than doubled in less than 5 years and there is little hope in sight. There does not seem to be much of an economic recovery plan and the economy is increasingly taxed by the refugee crisis.
Some of the “highlights”:
• The 2016 budget accounts for total expenses of 8.496 billion dinars ($11.983 billion), total revenues of 7.589 billion dinars ($10.704 billion), and a deficit of 907 million dinars ($1.279 billion), or about three percent of gross domestic product (GDP). Revenues are further divided into $9.558 billion from internal sources, such as customs and fees, and foreign aid of $1.148 billion….
• …Combined, this means that of overall 2016 spending ($14.7 billion), roughly 79 percent is covered by revenues ($11.6 billion), 9 percent by aid ($1.3 billion), and 12 percent is new debt ($1.8 billion).
• …an increase of $3.2 billion in the national debt in 2015—including regular deficit, new electricity debt, and accumulated interest—brought Jordan’s debt-to-GDP ratio to 90 percent and more than doubled its absolute debt in less than five years.
• ….Jordan is increasingly turning to foreign aid to offset its debt, particularly from the United States and the Gulf. The Congressional Research Service reports that 2016 U.S. aid for Jordan is set at “not less than” $1.275 billion, with additional aid above that level available through separate military provisions. While U.S. economic aid to Jordan dates back to 1951, it has increased substantially in recent years, and was still below $400 million per year in 2011, increasing to $700 million in 2014.
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